BERLITZ KIDS FRANCHISINGA world of opportunity

BERLITZ COMPANY 05 History and operating principles

THE FRANCHISE SYSTEM - 09 Why Berlitz?

IN BUSINESS FOR YOURSELF NOT BY YOURSELF 11

THE BERLITZ FRANCHISE SYSTEM AT A GLANCE 12

PRODUCTS & SERVICES 13 Live Instruction and a range of courses for kids and teens

BERLITZ KIDS AND TEENS PROGRAMS 14

START-UP INVESTMENT INFORMATION 17

Index

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“LEARNING A NEW LANGUAGE AS AN ADULT CAN BE HARD. WHY NOT GIVE YOUR CHILD A HEAD START?”

4 Berlitz Company

BERLITZ COMPANY – HISTORY AND OPERATING PRINCIPLES

WHO WE ARE Since Maximilian D. Berlitz founded the company in 1878 Berlitz Corpora-

tion has become the world’s premier language services company. At more

than 550 Berlitz language centers in over 70 countries around the world –

both corporate and franchised locations – we serve clients with our exper-

tise in language training and cultural consulting.

Confidence is our goal for our clients: for them to build their confidence in

using their language skills in a variety of settings and in functioning in a

new cultural environment – and with these abilities to achieve their own

professional and social goals.

With worldwide headquarters in Princeton, New Jersey, USA, Berlitz con-

tinues to expand both in countries where we have been for more than 100

years and in completely new markets. The launch of Berlitz Franchising

Corporation activities in 1996 has brought our name and services to over

100 new locations on five continents. Functioning as integral members of

the Berlitz global network, franchises share the same Berlitz standards

and approaches. These elements have created millions of successful Ber-

litz students over more than 130 years.

Berlitz has been a member of the Benesse Corporation of Japan since

1993. “Benesse” means living life to the fullest (from bene = good/well

and esse = life/being). This philosophy harmonizes perfectly with our

business and training goals for the student experience at Berlitz.

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THE BERLITZ EXPERIENCEBerlitz brings multiple approaches to the child's learning experience. Separately, these elements are all convincing arguments to choose Berlitz. Together, they add up to a total experience no other organization can match.

The Berlitz Experience is:

THE BERLITZ METHOD ®A conversational approach that emphasizes listening and speaking over memorization forms the heart of all Berlitz instruction. This world-famous method, pioneered by Maximil-ian D. Berlitz, is the most natural and effective way to learn a new language.

BERLITZ INSTRUCTORSNative-fluent instructors all go through the Kids Instructor Training program that ensures consistent delivery and quality worldwide.

BERLITZ ENVIRONMENT In private one-on-one lessons or in small groups, the Berlitz training experience maximizes child's speaking time – building confidence in speaking the language. Berlitz staff and instructors work to ensure a comfort-able, fun and professional atmosphere that is conducive to learning. During the program they provide regular feedback and motivation for the child.

BERLITZ MATERIALS Engaging materials are an integral part of the curriculum. Berlitz materials have been developed using customer feedback and field research to maximize learning.

BERLITZ PERSONALIZED CONSULTATION To ensure a language program appropriate for each child, every program begins with an individualized consultation with the parents or guardians in order to get familiar with the child’s goal and to familiarize them with what to expect at Berlitz. We want our customers to choose Berlitz.

“Confidence is our goal for our customers.”

6 Berlitz Company

The Berlitz Experience is the integration of four elements:

SMALL CLASS SIZECENTERS

CONDUCIVE TO LEARNING

CLASSROOM ENVIRONMENT

NATIVE-FLUENTWELL-TRAINED

INSTRUCTORS

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CUSTOMER-DESIGNED

AND TESTEDMULTI-COMPONENT

FLEXIBLE, CUSTOMIZED

MATERIAL

TARGET LANGUAGEGOAL-ORIENTED

AND LIVELY METHOD

“FRANCHISING WITH BERLITZ IS AN EXCITING OPPORTUNITY TO PARTNER WITH THE WORLD’S LEADING BRAND IN LANGUAGE SERVICES.”

8 The Franchise System

THE FRANCHISE SYSTEM - WHY BERLITZ?

THE FRANCHISE SYSTEM / WHY BERLITZ? Franchising with Berlitz is an exciting opportunity to partner with the world’s leading brand in language services: an organization based on professional operating systems, innovative products and services, and ongoing management support to help you implement our business practices. The combination of educational products and international business experience makes Berlitz franchising a unique investment opportunity.

Why franchise with Berlitz instead of working independently? If you want to focus your work on building your share of the marketat your location, you will also want not to waste time creating a business image and concepts with the procedures necessary to support them. Use your time more efficiently to implement the best-practices experience of Berlitz – the world leader.

Franchise candidates who chose to build their business within the Berlitz model can create many personal as well as professional rewards.

THE BRAND Coca Cola®. Levi’s®. Mercedes Benz®. Berlitz®. It’s not hard to say that in the language services field, Berlitz’s reputation is as strong as many of the most- trusted consumer brand names in the world. That’s one of the biggest benefits of teaming up with Berlitz. The brand name is powerful. Either Berlitz is already well known or you can easily show clients the strength of our world- wide presence, reputation for high quality, and famous instruction methods. With your own sales skills, you’ll be joining forces with a market leader – honored and trusted for over 130 years of service to millions of clients.

THE OPERATING SYSTEMTo create the value of the Berlitz brand name we have developed a system of business prac-tices. As a Berlitz franchisee, you receive the right to follow our management systems that are designed to ensure the high quality of customer service, of key operations procedures and of instruction.

You will manage your franchise based on our Operations Manual and Language Center Manage-ment System™ that define our business model and track your local customers. The Operations Manual brings together our worldwide experience – based exclusively on our Berlitz real-life best practices – into one system. Naturally you will have the right to offer Kids language instruction using the renowned Berlitz Method ®. And unlike many schools that limit themselves to a single language, Berlitz meets the world challenge by offering English, German, French, Spanish, and many others, as well as the Berlitz Kids Camps.

As a Berlitz Kids franchise owner, you will be joining a proven team in the language business. But our interest in your success goes far beyond spreading the name. Your success is our success.

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ONGOING SUPPORT This Berlitz “Management Support” has the priority of helping you implement our Operat-ing System. Before you open the doors of your new language center, you will complete our New Kids Franchise Orientation and Product and Sales Training. In addition your franchise will receive a Kids Instructor Training and train-ing in administrative procedures.

You will be able to use the Master Franchisor’s website and any locally developed promotional and marketing materials.

Berlitz strategic initiatives are shared with you to harmonize your market approach with our global, regional or national concepts that may apply to your location.

On the basis of the Operations Manual sys-tem, Berlitz provides periodic evaluation of your business with the purpose of helping you maintain and improve your operations. This evaluation, our “Quality Audit,” focuses on all the key operational aspects of your business to give you feedback for use in your annual strategic business planning.

FRANCHISE PROFILE

We are looking for out-going, children-orient-ed entrepreneurial business people with the following ideal qualifications:

• Strong local market and law knowledge: Preferably direct personal experience op-erating a business in the market identified.

• Proven business background: Prefer-ably professional experience in the areas of sales and marketing or child care and education.

• Sufficient financial resources: The invest-ment for a fully operational Kids Franchis-ing Micro Language Center ranges from € 15,000 -25,000 depending on local costs.

• Fluency in the local language and culture• Good command of the English language,

CEF level A2/B1.• Strong interest in the Berlitz brand and

the Berlitz products.• Strong customer orientation with special

focus on children.• Ability to master complex operating

systems.

“As a Berlitz Kids franchise owner, you will be joining a proven team in the language business.”

10 The Franchise System

03 IN BUSINESS FOR YOURSELF, NOT BY YOURSELF

YOUR MOTIVATION You want to use love for children and your talent for doing business in the world of language. You want to create your reputation as the world-class service provider in your local market. You want to implement a proven system so you can better spend your time promoting your business. You want to run your own business – but do it by using the resources and structure of the world leader. You want to join the Berlitz Kids franchise program!

If you become a Berlitz Kids franchisee, you will take advantage of the following program elements, which we update according to changing business conditions:

BERLITZ OPERATING PRINCIPLES Berlitz Franchising Corporation exists to expand our brand into new markets, and to ensure the quality of service that has created the value of our name. We select, prepare and assist franchisees to establish strong Berlitz operations. We support you in developing strategies for growth in your identified market segment – and in building the efficiency of your operations.

OPERATIONS AND SYSTEMS You use the results of decades of Berlitz experience in business systems and language learning techniques. Our standard day-to-day language center management systems, customer relations programs, personnel selection and supervision programs and many others are used in Berlitz franchises just as in our corporate locations. And of course you use the famous Berlitz Method® of instruction as has been developed and tested in hundreds of Berlitz Language Centers worldwide.

Each franchise location is assigned to a re-gional Master Kids Franchise Manager as the main contact person. The Master Kids Fran-

chise Manager coordinates Berlitz resources in supporting your implementation of the Berlitz model in your local business. To help you evalu-ate your progress, the Master Kids Franchise Manager coordinates the Berlitz operations “Quality Audit” which gives you feedback on your strengths and helps you plan neces-sary improvements. You will use our required software – the Language Center Management System™ – to enhance operations, from cost and sales process analysis to teacher schedul-ing and beyond.

ORIENTATION AND TRAINING Our training goal is to enable your implemen-tation of the Berlitz business model. First and foremost is beginning well. When your fran-chise application is approved you will already have prepared a proposed financial and strate-gic plan. Next comes our New Kids’ Franchise Orientation – the philosophy and tactics that have allowed Berlitz to grow over some 130 years. In our franchisee selection process we profile candidates’ talents in key areas in order to focus our initial orientation.

Just before opening, your language center staff receives Kids Product and Service Training, operations training and, for teaching staff, Kids Instructor Training. These sessions emphasize day-to-day operations and the characteristics of Berlitz programs.

During your years as a Berlitz Kids franchisee you may attend periodic meetings presenting corporate strategies, training in new products, or developing management skills – and in every one you expand your network of corpo-rate and franchisee colleagues. You become a member of the Berlitz worldwide family.

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04 BERLITZ FRANCHISE SYSTEM – AT A GLANCEAs a Berlitz Kids franchisee, you receive the right to use our business concept at your loca-tion. With your own sales and leadership abili-ties, you will apply these three key elements to gain market share – and build your business.

BRAND

• Power of the Berlitz name• Exclusive kids business area• International corporate recognition• Unique worldwide network

OPERATING SYSTEM

• Operations Manual• New Kids Franchise Orientation• Berlitz Method®• Customer care and retention process• Berlitz products and services for clients• Quality control process• Management system software• Business planning process

ONGOING SUPPORT

• Dedicated Master Kids Franchise Manager• Pre-opening training program• Kids Instructor Training• Facility design assistance• Strategic business consultation• Marketing materials review• Periodic management meetings

12 The Franchise System

BRAND

OPERATING SYSTEM

ONGOING SUPPORT

05 PRODUCTS & SERVICES – LIVE INSTRUCTION AND A RANGE OF COURSES FOR KIDS AND TEENSPRIVATE INSTRUCTIONBerlitz private instruction enables the child to learn at a pace and on a schedule that is tailored to their needs. Course content can also be most specifically customized to match their interests and the situations where they will need the language in everyday life.

GROUP INSTRUCTIONGroup instruction – social and lots of fun – al-lows a wide variety of activities where peer learning can take place. Group instruction is more economical than private instruction, and some children also find it easier and more rewarding to share in the goal of learning an-other language by practicing together.

Berlitz also offers a wide range of intensive group courses, e.g., weekend courses or 1- or 2-week courses. These appeal particularly to parents whose child cannot follow a program over many weeks and who thus prefer to dedicate a block of time specifically to focus on their child's language skills.

BERLITZ KIDS

Berlitz Kids courses are exciting, innovative, and great fun.

• Starter and Primary Mimi programs for Kids 4 to 7

• English BeatTM for Kids 8 to 11• English for Teens 12 and Up• Other languages – German, French,

Spanish, etc, for all age groups• Tutoring and preparing for Matura and

other exams• Berlitz Kids Camps

“Group instruction– social and lots of fun – allows a wide variety ofactivities.”

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Berlitz Kids courses are exciting, innovative, and great fun.

STARTER AND PRIMARY MIMI PROGRAMS FOR KIDS 4 TO 7MIMI &MEWith MIMI & ME learning English and preparing for the future is child’s play!The Mimi & Me program is a unique learning opportunity for children ages 4 through 7. Based on proven Berlitz methods and the most up-to-date pedagogical research, Mimi & Me helps children learn how to speak and interact naturally in English just as their ability to acquire languages starts to peak.

ENGLISH BEATTM FOR KIDS 8 TO 11AN EFFECTIVE PROGRAM FOR SCHOOLCHILDRENWHO IS IT FOR?The program is made for schoolchildren over the age of 8. It is a new, different, fun, attractive and creative program, which is also demanding and full of challenges. Through various games, movements, music, exciting stories and role-plays, our language instructors and the rich multimedia material encourage children to speak and understand by listening, reading, writing and understanding English.

ENGLISH FOR TEENS 12 AND UPTIME ZONESAt Berlitz, we do not only teach the English language, we also offer courses to develop the ability to deliberate with logic. For example, in the reading classes, we invite the students to discuss their impressions about the contents of a text.Comprehensive coordination with adequate balance of the "speaking, listening, reading, and writing" skills.

BERLITZ KIDS AND TEENS CAMPSBerlitz International Camps are specially designed study abroad programs offered during the summer and winter. Teenagers from around the world will learn together in shared accommodation. These programs focus on expe-riential learning to broaden the horizons of teenagers to become successful global citizens.

Other languages – German, French, Spanish, etc, for all age groups

Tutoring and preparing for Matura and other exams

14 Berlitz Kids and Teens Programs

BERLITZ KIDS AND TEENS PROGRAMS

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STEPS TO BECOMING A BERLITZ KIDS FRANCHISEE

1. JOIN THE BERLITZ FAMILY

2. CONSULT WITH YOUR ADVISORS REVIEW PROSPECTUS

3. MEET WITH BERLITZ PERSONNEL

4. SUBMIT YOUR APPLICATION REVIEW OUR FRANCHISE MATERIALS START

16 Start-Up Information

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Range

Equipment and fixtures (depending on leasehold improvements)

€ 5,000 - 9,000

Initial inventory € 2,000 - 3,000

Operational capital and prepaid expenses € 2,700 – 7,500

Estimated first month’s rent € 300 - 500

Initial Fee € 5,000

TOTAL € 15,000 - 25,000

The Berlitz Kids Language Center Initial Fee is €5,000 for a single unit. Upon Berlitz approval of your application, the Initial Fee needs to be paid at once after awarding and is non-refundable in total.

In addition to the Initial Fee, a franchise royalty equal to 13 percent of the language center’s gross sales is payable on a monthly basis.

Estimated capital requirements for opening each standard language center include:

All costs, with the exceptionof the franchise fee, will vary according tolocation size.

START-UP INVESTMENT INFORMATION

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The above figures do not include possible additional leasehold improvements and other costs dictated by the facility selected. All costs, with the exception of the Initial Fee, will vary according to location size and local market values.

BERLITZ LOCATIONS WORLDWIDENORTH AMERICA

CanadaBrossardCalgaryLavalMarkhamMississaugaMontrealOttawaQuebecSt-LaurentToronto (2)VancouverUSAArizonaPhoenixCaliforniaBeverly HillsCosta MesaPasadenaPalo AltoSan DiegoSan FranciscoSanta MonicaTorranceWoodland HillsColoradoDenverConnecticutStamfordWestportWest HartfordDCWashington, DCFloridaBoca RatonFt. LauderdaleMiami (Coral Gables)Miami (Brickell)OrlandoGeorgiaAtlantaIllinoisChicagoOak BrookSchaumburgIndianaIndianapolisMarylandOdentonRockvilleMassachusettsBostonWellesley HillsMichiganDetroitMinnesotaMinneapolisMissouriSt. LouisNew JerseyPrincetonRidgewoodSummit

New YorkGarden City/MineolaRockefeller CenterWall StreetWhite PlainsNorth CarolinaCharlotteRaleighOhioCincinnatiIndependence/ClevelandOregonPortlandPennsylvaniaPhiladelphiaWayneTexasAustinDallasHoustonVirginiaTysons CornerWashingtonBellevueWisconsinMilwaukee

LATIN AMERICA

ArgentinaAcassusoBelgranoBuenos AiresPalermoBrazilAlphavilleBelo HorizonteBrasiliaCuritibaFortalezaPorto AlegreRio de Janeiro (2)São Paulo (11)SorocabaChileConcepciónSantiago (4)Viña del MarCosta RicaSan José (4)DominicanRepublicSantiago de losCaballerosSanto DomingoEcuadorGuayaquilQuitoEl SalvadorSan SalvadorGuatemalaGuatemala CityColombiaBarranquilla

Bogotá (5)BucaramangaCali (2)CartagenaMedellínPereiraMexicoAguascalientesCancúnCuautitlánCuernavacaCuliacánGuadalajara (3)LeónMéridaMetepecMexico City (9)Monterrey (2)Naucalpan (2)OaxacaPachucaPlaya del CarmenPueblaQuerétaro (2)ReynosaSaltilloSan Luis Potosí (2)TampicoTijuanaTolucaVeracruzVillahermosaPanamaPanama CityParaguayAsunciónPeruLima (3)Puerto RicoAreciboCaparraCarolina/Isla VerdeHato ReyPonceUruguayMontevideoVenezuelaCaracas (3)LecheríasMaracaiboPuerto OrdazValencia

ASIA/PACIFICOCEAN

AustraliaSydneyChinaBeijingChengduGuangzhouShanghai (3)SuzhouTianjin

Hong KongHong KongIndonesiaJakarta (2)JapanAichi (5)Chiba (3)Chiyoda-ku (4)Chofu-shiChuo-kuHiroshimaHyogo (3)Kita-kuKyoto (2)Machida-shiMeguro-ku (2)Minatu-ku (6)Musashino-shiNerima-kuOkayamaOsaka (5)SaitamaSendaiSetagaya-ku (3)Shibuya-kuShinagawa-kuShinjuku-kuShizuoka (2)Toshima-kuTachikawa-shiTaito-kuTama-shiPakistanKarachi (2)LahorePhilippinesMakatiMandaluyongSan JuanSingaporeSingaporeSouth KoreaSeoul (3)ThailandBangkok (3)

EUROPE

AustriaGrazKlagenfurtLinzSalzburgVienna (4)Wiener NeustadtBelgiumAntwerpBruggeBrussels (2)CharleroiGeelGentHasseltLiègeMechelen

18 Berlitz Locations Worldwide

MouscronNamurTienenTournaiWaterlooWevelgemBulgariaPlovdivSofiaStara SagoraVarnaCroatiaZagrebCzech RepublicBrnoPragueDenmarkCopenhagenLyngbyGermanyAachenAugsburgBerlin (4)BielefeldBonnBraunschweigBremenChemnitzCologneDarmstadtDortmundDresdenDuisburgDüsseldorfErfurtEschbornEssenFlensburgFrankfurtFreiburgFreisingHamburg (2)Hanover (2)HeidelbergHeilbronnHildesheimIngolstadtKarlsruheKasselKielKoblenzKrefeldLeipzigLübeckMagdeburgMainzMannheimMönchengladbachMunich (2)MünsterNorderstedtNurembergOffenbachOldenburgRatingen

RegensburgRendsburgReutlingenRosenheimRostockSaarbrückenStuttgart (2)UlmWiesbadenWolfsburgWuppertalFinlandHelsinkiFranceArrasBordeauxBoulogneCergy-PontoiseDunkerqueEvryGrenobleLe HavreLilleLyon (2)MarseilleMontigny-le-BretonneuxMontpellierNantesNiceNoisy-le-GrandParis (4)RouenSaint EtienneSaint-Germain-en-LayeSt. DenisStrasbourgToulouseVersaillesVillepinteGreeceAthensHungaryBudapest (2)IrelandDublinItalyMilanRome (4)SiracusaTurinLatviaRigaLuxembourgLuxembourgMaltaSt. JuliansNetherlandsAmsterdamDen HaagMaastrichtRotterdamNorwayOslo

PolandGda skKattowiceCrakowŁódPoznaWarsaw (3)WrocławPortugalLisbonRomaniaBucharestTimișoaraRussiaMoskowSerbiaBelgrade (3)SlovakiaBratislavaSloveniaCeljeKranjLjubljanaMariborNovo MestoSlovenj GradecSpainBarcelona (2)Madrid (5)Palma de MallorcaSan Sebastián de losReyesSevillaValenciaSwedenGothenburgMalmöStockholmSwitzerlandBaselBernBielGeneva (2)LausanneLuzernZugZurichTurkeyAnkaraUnited KingdomBirminghamBrightonEdinburghLondonManchesterOxfordWindsor

MIDDLE EAST/ AFRICA

AlgeriaAlgiersBahrainBudaiyaManama

EgyptAlexandriaCairo (4)IsraelAshdodBe’ér ShevaHaifa (2)JerusalemNetanyaRaananaRamat GanRishon LeZion Tel AvivWest RishonJordanAmmanKuwaitKuwait CityLebanonBeirutMoroccoMarocCasablancaRabatTangerQatarDohaSaudi ArabiaAl-KhobarJeddahMeccaRiyadhSouth AfricaCape TownSyriaAleppoDamascusUnited Arab EmiratesAbu Dhabi (3)Dubai (2)Sharjah

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© Berlitz Franchising Corporation 2012 Contact Ankica Kutle Beljan Phone: +385 (0) 148 121 16

E-Mail: berlitz-zg@berlitz.hr www.berlitz.com